Status of secondary activities under Act on Transparent and Predictable Employment Conditions: Don’t restrict and don’t ask?

Prohibition of secondary activities prohibited unless objective reason
Since the introduction of the Act on Transparent and Predictable Terms of Employment Conditions (Wet Transparante en Voorspelbare Arbeidsvoorwaarden, 1 August 2022), it is no longer permitted to agree on a secondary activities clause, unless the employer has an objective reason for such a prohibition.

Examples of objective reasons include:

• health and safety being compromised by the secondary activities;
• protecting the confidentiality of business information;
• the avoidance of conflicts of interest; and
• conflict with working time legislation.

The objective reason(s) invoked by an employer must be valid at the time the employer invokes the clause. The reason does not have to be included in the secondary activities clause.

Reporting requirement still acceptable
A requirement to seek permission and/or to report secondary activities is still acceptable.

On the basis of such an obligation, the employee must first inform the employer of his/her (intended) secondary activities. This allows the employer to decide (i) to allow the secondary activities without restriction, or (ii) to impose a restriction or prohibition on the secondary activities, based on an objective reason.

Recent example
A recent court ruling illustrates that an employee’s failure to comply with an agreed permission requirement or reporting obligation can be considered culpable conduct on the part of the employee.

The ruling concerns an employee of a school community. The applicable collective agreement and the integrity code require the employee to inform the employer of any secondary activities (reporting obligation).

Following a conversation with the employee about secondary activities, the employer indicates that it has not been able to find any documentation on the employee’s secondary activities in its files. The employee responds that he has indeed reported his secondary activities.

The employer then repeatedly asks the employee to provide a clear and complete statement of his secondary activities, including an indication of the organisations for which the works, and the time involved. The employee refuses to do so and keeps repeating that he had already received permission (from several former board members of the school community). An investigation by company investigators shows that the employee is carrying out ‘a significant number of hours’ of secondary activities.

Ultimately, this leads to a court procedure in which the employer requests the subdistrict court to terminate the employment agreement on the grounds of (seriously) culpable behaviour on the part of the employee. In the procedure, the employee argues that the employer was not entitled to prohibit him from secondary activities.

The subdistrict court considers that the issue in this case is not whether or not the employer was entitled to prohibit the secondary activities under the collective agreement (or the integrity code). Rather, the issue is about the phase before that, namely whether the employee was obliged to report his secondary activities.

The subdistrict court rules that a reporting obligation had been agreed and that the employer was therefore entitled to ask and expect the employee to disclose. As the employee did not do so, the employer could not assess whether there was an objective reason to prohibit the secondary activities (e.g. conflict with working hours legislation or avoidance of conflicts of interest). As the employee could not explain why he continued to refuse to disclose, the subdistrict court ruled that the employee acted culpably, leading to termination of the employment agreement.

Recommendation to employers: Permission or reporting requirement
Secondary activities may only be prohibited on the basis of an objective reason. In order to be able to determine whether the employer has such a reason, the employer may, by means of a permission/reporting obligation, require the employee to make a concrete statement of any secondary activities in advance.

We therefore advise employers to include a reporting/permission requirement in the employment agreement. Employers remain free to do so, even after the Act on Transparent and Predictable Employment Conditions.

Want to know more about the reporting obligation or a possible prohibition on secondary activities in a specific case? Contact us and we will be happy to discuss!